Over-concentration is when a financial advisor or broker recommends placing a significant portion of your investment portfolio into a single asset class or type of investment.
You may not notice a problem for years, until a shift in market forces, or a hidden defect of the investment reveals itself.
As a rule of thumb, not more than 20% of an investor’s assets should be in a single type of investment.
Over-concentration is related to failure to diversify, and will often reveal other problems with the sale of the investment. Often, the broker or financial advisor will violate other rules such as breach of fiduciary duty -for example: by over-concentrating the investor’s portfolio because he or she receives a higher commission for a certain type of investment. Failure to properly diversify an investment may also constitute professional negligence, and fraud.
If you have significant financial losses, please contact us today for a free consultation.
The Law Office of Daniel Bakondi
Attorney Daniel A. Bakondi, Esq.
870 Market Street, Suite 1157
San Francisco CA 94102
(415) 450 – 0424